Discretionary Trading

Risk Warnings - General

This notice is provided to you as a Retail customer in compliance with rules of the Financial Services Authority (FSA). (Retail customers are afforded greater protections under these rules than other customers and you should be aware of your rights of access to the Financial Ombudsman Service and other benefits).

Investments in derivatives such as CFDs (which are defined as Margin Trading) can be very speculative and may result in losses as well as profits. Derivatives trading entails a considerable risk factor and is therefore not suitable for every investor. You should carefully consider your financial situation and understand the risks (seeking independent advice if necessary) prior to making any investment.

Margined Trading carries a higher risk of loss than trading many traditional instruments, such as most large cap equities or fixed income securities. For many members of the public these transactions are not suitable. You should not engage in Margined Trading unless you know and understand the features and risks of the Margined Trading you wish to carry on and are also satisfied that Margined Trading is suitable for you in light of your circumstances and financial resources.

A high degree of "gearing" or "leverage" is associated with Margined Trading. This stems from the margining system applicable to Margined Trades, which generally involves a comparatively modest deposit of the overall contract value to open a Margined Trade. This can work for you and against you. A small price movement in your favour can result in a high return on the money placed on deposit; however, a small price movement against you may result in substantial losses, possibly more than the money placed on deposit. Prices can move quickly.

You may be called upon to deposit substantial additional margin, at short notice, to maintain your Margined Trades unless funds are available. If you do not do so within the time required, your Margined Trades may be closed at a loss and you will be liable for that loss.

Please remember that the price or values of investments can go down as well as up. You may not get back the amount invested. Past performance is not necessarily a guide for future performance.

Foreign Markets - Foreign markets will involve different risks from the UK markets. In some cases the risks will be greater. On request, IIDT will provide an explanation of the relevant risks and protections (if any) which will operate in any foreign markets, including the extent to which it will accept liability for any default of a foreign firm through whom it deals.

The potential for profit or loss from transactions on foreign markets or in foreign denominated contracts will be affected by fluctuations in foreign exchange rates.

Suspensions Of Trading - Under certain trading conditions it may be difficult or impossible to liquidate a position. This may occur, for example, at times of rapid price movement if the price rises or falls in one trading session to such an extent that under the rules of the relevant exchange, trading is suspended or restricted. Placing a stoploss order will not necessarily limit your losses to the intended amounts, because market conditions may make it impossible to execute such an order at the specific price.

Clearing House Protections - On many exchanges, the performance of a transaction by IIDT (or third party with whom they are dealing on your behalf) is 'guaranteed' by the exchange or clearing house. However, this guarantee is unlikely in most circumstances to cover you, the customer, and may not protect you if IIDT or another party defaults on its duty to you. On request, IIDT must explain any protection provided to you under the clearing guarantee applicable to any on exchange derivatives in which you are dealing. There is no clearing house for traditional options, nor normally for off-exchange instruments, which are not traded under the rules of a recognised or designated investment exchange.

If you deposit collateral with us, we will agree with you separately how that will be dealt with. The Client Money Rules of the FSA will apply to your money unless we have entered into a separate agreement with you to the effect that the Client Money Rules do not apply.

In the unlikely event that we were to face liquidation, if you are deemed at the time of the liquidation to be an eligible claimant under the rules of the Financial Services Authority, you will be covered by the Financial Services Compensation Scheme to a maximum of £48,000 (claimants would receive the first £30,000.00 in full and 90% of the balance - a total of £48,000.00).

If there is anything you do not understand, or you require clarification on any matter, please contact us on 0845 88 00 267.

General risk warning concerning investment

The tax treatment of Contracts for Difference and SIPPs is subject to government legislation and as such may not be maintained.
The levels and bases of, and reliefs from, taxation may change in the future.
Rates of exchange may cause the value of investments to go up or down.
CFDs are leveraged products and carry a high level of risk to your capital.

Due to the leverage offered it is possible for you to incur losses in excess of your initial capital. These products are not suitable for all investors.

Risk warnings in respect of non-readily realisable investments.

This notice cannot disclose all the risks and other significant aspects of warrants and/or derivative products such as futures, options, and contracts for differences. Unless you understand their nature and the extent of your exposure to risk you should not open an account. You should also be satisfied that the product is suitable for you in the light of your circumstances and financial position. Certain strategies, such as a spread position or a straddle, may be as risky as a simple long or short position.

Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors.

This service is being introduced to you by Interactive Investor, a trading name of Interactive Investor Trading Limited which is authorised and regulated by the Financial Services Authority. Registered Office: First Floor, Standon House, 21 Mansell Street, London E1 8AA. Company Number: 3699618.

Interactive Investor Discretionary Trading (IIDT) is a trading name of Direct Sharedeal Limited, a member of the London Stock Exchange and authorised and regulated by the Financial Services Authority. Registered office: 4 West Regent Street, Glasgow, G2 1RW. Company Number: SC188017